Check my work 2 The owner of Genuine Subs, Inc., hopes to expand the present ope

Question

Check my work 2 The owner of Genuine Subs, Inc., hopes to expand the present operation by adding one new outlet. She has studied three locations. Each would have the same labor and materials costs (food, serving containers, napkins, etc.) of $1.60 per sandwich. Sandwiches sell for $2.70 each in all locations. Rent and equipment costs would be $5,080 per month for location A, $5,530 per month for location B, and $5,800 per month for location C 14 points a. Determine the volume necessary at each location to realize a monthly profit of $10,000. (Do not round intermediate calculations. Round your answer to the nearest whole number.) Skipped Location Monthly Volume eBook Hint References b-1. If expected sales at A, B, and C are 20,300 per month, 22,100 per month, and 23,400 per month, respectively, calculate the profit of the each locations? (Omit the "$" sign in your response.) Location Monthly Profits b-2. Which location would yield the greatest profits? Location B Location A Location C

Explanation / Answer

Let us see what is given:

for a.

Q=specified profit+FC/(rev/unit-FC/unit)

example, A=(10000+5080) / (2.70-1.60)

A=13709 or 13710

Calculate the same for all the others...

For part b.

Profit = ( Rev/unit -VC/unit)*Q-FC

Let us see for A,

Profit for A= (2.70-1.60)20,300-5080

=17250

Calculate the same for others(B and C)...

Part b-2...Hint look at the expected sales in question b-1...

Location A B C Revenue/unit $2.70 $2.70 $2.70 VC/unit $1.60 $1.60 $1.60 FC $5080 $5530 $5800

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